Forget the Russians and Arabs: The Chinese are at the front of the queue for luxury goods in Britain

Their grasp of English may, in some cases, be non-existent. But it doesn’t really matter here amid the £4,000 handbags at Harrods or the trays of watches costing five figures in London’s Bond Street. Because these visitors are fluent in another dialect — the language of the logo.

And that is the only one which really counts in this bubble of excess.

Recent days have seen a fresh surge in a phenomenon which is restoring a cautious smile to smarter sections of both the retail world and the fashion industry: the Chinese are in town, and spending as never before.

Surge: Chinese shoppers swarm into Selfridges on Boxing Day

The future is certainly grim on British High Streets, where a number of household names have just joined the corporate critical list. But it is very different at the top end of the capital’s luxury goods market.

Just look at some of the extraordinary images from last week’s Boxing Day sales in London. Were it not for the occasional red double-decker in the background, this might have been Shanghai or Kowloon.

Selfridges, the retail giant of Oxford Street, reports that Chinese customers have increased their year-on-year spending by 65 per cent — and there are still more than two months to go in this financial year.

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When Selfridges opened on Boxing Day, it promptly clocked up the most lucrative hour in the store’s entire history (£1.3 million in 60 minutes).

Thousands of Asian shoppers were to be found elbowing their way through the throng as keenly as the most bargain-savvy Brits.

Not long ago, the number one Asian clientele would have been Japanese. But that is so 20th century. The Pacific’s financial tectonic plates have well and truly shifted. In the past 12 months, visitors from China have comfortably surpassed all the oil-rich Arab nations, Japan, Russia and the U.S. to become Selfridges’ number one overseas nation in terms of spending power.

Lucrative: Shoppers crowd at the tills in Selfridges, on Oxford Street

The store’s Boxing Day customers apparently included Chinese actress Li Bingbing, who departed with various Mulberry, Reiss, Nicole Farhi and Paul Smith products.

At the weekend, there was keen Chinese interest in the first-floor display of £20,000 diamond-encrusted Chanel watches. The Gucci counter was down to its last £4,500 Sunset bag, while the most popular item for Chinese buyers is the £560 Sukey tote bag. As a staff member pointed out: ‘It’s not even in the sale.’

And these Chinese tourists are lured to Britain not by the Tower of London or cream tea in the Cotswolds. They come in search of just one thing: luxury brands.

The world’s most populated country is fast becoming a nation of WAGS. Just imagine a billion Coleen Rooneys on the prowl. No wonder the upper end of the retail world is looking perky — even if some of these customers can display a haughtiness towards the staff which would make a Downton dowager blush.

The New West End Company, the trade association for Britain’s three most famous shopping streets —Oxford Street, Regent Street and Bond Street — says an average Chinese shopper in London’s West End currently splashes out £1,300 on a normal day. The typical British customer parts with just £130.

In other words, the average Chinese shopper outspends locals by an astonishing ten to one.

Little wonder the Department for International Development just axed Britain’s £40 million aid budget for China.

The same pattern is reflected across a wider spectrum. Global Blue organises tax-free shopping all over the world and has observed a 63 per cent rise in Chinese spending in the last year alone. Even more striking is the typical spend of a Chinese visitor to London. In November, it was up to £727 per single transaction. When the figures for December come through, it should be higher still.

Over at Harrods, the average spend is even greater. Earlier this year, using data from VAT reclaims, the store revealed that its average Chinese customer spends an astonishing £3,500 per visit. And many shoppers will make many visits.

With that sort of spending power, who cares if one or two are brisk with the staff — or occasionally rip open the packaging to rummage around inside?

A key factor has been a small but seismic technical innovation. Until recently, Chinese credit cards were not valid in London shops, which meant Chinese shoppers had to come armed with wads of cash.

Ready, steady, go! All this splashing out is just the start, with China expected to dominate luxury goods sales in the coming decade

Now, special China Union pay terminals have been introduced which allow customers to pay directly from their bank accounts back home without incurring extra charges.

Selfridges has already installed 60 of them, and Harrods has a similar number. Both stores have also recruited teams of Mandarin-speaking floor-walkers to guide Chinese customers to the nearest racks of Dior or Mulberry.

Staff have even been instructed in the fine art of handling a Chinese credit card: always hold the hallowed plastic with two hands outstretched and treat it with reverence, like some votive offering.

If it fails to connect first time, under no circumstances should you follow the usual British shop assistant’s habit of rubbing it on your sleeve a few times, trying it the other way round and then saying: ‘Nah. Ain’t you got somefink else?’

What is as remarkable as all this splashing out is the fact that this is just the start.

Ten years ago, China barely featured on the retail radar. Even now, they come in relatively small numbers. But this is a country with 960,000 people already worth more than £1 million, and they love to travel. What’s more, according to Global Blue, more than half of those who come to Britain are young, fashion-conscious and aged from 25 to 44.

International management consultants
McKinsey & Co have produced a detailed report on the insatiable
Chinese appetite for luxury goods. The authors predict that just three
years from now, China will be spending a whopping £18 billion a year on
luxury brands such as Gucci, Burberry and Louis Vuitton, accounting for a
fifth of the entire world market.

And that’s just at home. More and more will go abroad to buy. And London is ready to welcome them with open arms.

Bagging the brands: Melody Wang, 24, and Doreen Nie, 20

Last year, China dispatched 110,000 visitors to Britain, where they spent an estimated £350 million between them. On current form, we could see multiples of those figures in a year or two.

Another report, by the investment group CLSA Asia-Pacific, calculates that by 2020, the Chinese hold over the world’s premier fashion brands will be unassailable. Its analysts say China will consume 44 per cent of all the world’s luxury goods. And they are considerably cheaper in London than at home.

‘I’m on the lookout for a Burberry raincoat and scarf,’ says Selfridges customer Chen Lin, 28, a Chinese businesswoman. ‘It’s so much cheaper here and there’s more choice. I wouldn’t even look for Burberry in China. It’s overpriced.’

Tourist Mali Ding, 40, said she has come to London purely for the sales. ‘I don’t know what I want to buy yet, but it is so much better here than at home. It’s cheaper, and the stuff here is newer.’

‘A Chinese customer can save up to 30 per cent buying tax-free in London rather than paying sales tax at home,’ says a spokeswoman for Global Blue.

With that sort of saving, you could buy one £4,000 bag and cover the cost of the trip.

There is a certain irony that a country famous for rigorous protectionist tariffs on imported goods —not to mention a thriving black market in counterfeit goods — should be quite so relaxed about its citizens coming home with armfuls of tax-free Western trophy purchases.

But Chinese attitudes are changing. Fake watches and handbags, once commonplace, are now social death in polite Chinese society.

And while customers from the Gulf and Russia are long-established consumers of top-end bling in Britain — flash jewellery, fast cars, fur coats and so on — the Chinese are different. They are more understated and they buy in bulk.

An entrenched gifting culture means they will buy a dozen Hermes scarves at a time — not only for family members but for bosses, colleagues and for any officials whose palms need crossing.

As traditional forms of bribery are weeded out, a Louis Vuitton bag for a commissar’s wife can go a very long way.

And not all these customers are especially wealthy. The McKinsey report reveals the rather depressing fact that an ordinary office worker in China will spend up to three months’ salary on a handbag — providing it has the right logo.

Just as London prices are being slashed after Christmas, the Chinese are working themselves into a shopping frenzy ahead of the ‘Golden Week’ surrounding the Chinese New Year — which, this year, falls at the end of this month.

Let’s be clear. Free-spending Chinese holidaymakers are not the remedy for our dismal economy. Selfridges points out that 70 per cent of its customers are domestic and, of the 30 per cent of international trade, only a part of that — albeit a large part — is Chinese.

Yet, we are starting to see a broader cultural and economic impact which will soon spread beyond the sparkling shopping halls of London W1.

Just last week, we learned fresh details of a scheme to build a luxury holiday village in Carmarthenshire for wealthy Chinese families.

Back in Oxford Street, more Selfridges bags full of the latest Louis Vuitton and Versace are beginning the long journey back to Beijing. This time next year, these shoppers will be back in even greater numbers — and with even greater spending power.

How much longer before a new phrase enters the Chinese language — a British takeaway?